Gary--If you were (i know you aren't) going to buy a slight in the money call option on a silver miner. How far out would you go-- Jan or March?I know you do not suggest but have done before and use little capital!thank you!!

DAG also have a much higher volume, although the bid/ask spread on GRU is only 2 cents. So they're both good. Just depends on whether you want the double long exposure and whether you want to include or exclude sugar prices from the mix.

With the double etfs, I wait until they turn my direction, or at least momentum slows (if picking a turning point) before I enter. They're great when the wind is at your back, but devastating to hold going against.

Dollar hit resistance at the downtrend line from the June high and has backed off a bit. We'll see whether it will make another try at that TL and break thru. If it does, it will likely head for the top of the upper channel line of the uptrending channel from the Nov 4 low before pulling back. That upper channel line is right about 79.85 now, but by tomorrow morning it will be at 80.11. That's right in Gary's target zone of 80.

We won't know whether the dollar is making a turnaround from this recent rally, though, until it breaks the lower channel line of that rising channel. Tomorrow morning that lower channel line is around 78.92.

""I just wanted you to know that not only did we raise margins last week............But we raised them Monday too..........and we decided to raise them again today. You see.....we will do everything to avoid the short squeeze you are all trying to bring on for the December delivery. That is why we waited until there was just two weeks notice for December futures to do this and why we are doing it as price DROPS. If you try and turn this around......we will raise them on Wednesday also."

$1,315 or not, if we don't bounce from this $90 3 day decline I would consider that bearish. First new long call positions (GDXJ) established right at the close today. Will wait for the post bounce to see if we can sustain the uptrend. Timing has been fairly easy to date, let's hope the script continues to unfold.

H,It's not the size of the message it's the number of recipent's that prevents me from emailing. If my email provider flags it as spam they shut down my outgoing email for three hours. I can't take a chance of being dead in the water for three hours during the week.

On Sunday's with the password it's OK. If I don't get it all out at once I can just wait and send out another batch as soon as I'm back up and runnning.

Please no TK bashing. He has a different style of trading than Gary. Learn how he is still in the game after 20 months of a bull market.

TK can manage 200 positions, enters them at good risk-reward points, cuts his losers and lets his winners stop him out. A lot of traders will benefit if they can incorporate his position entry and management style with their winning picks.

With proper money management, even absolutely random strategy can be made profitable.

Silver today showed great relative strength compared to gold, which came down to its post FOMC lows before finding buyers. This is kind of odd but shows that the bullish sentiment towards PMs, especially silver is still alive and kicking. This may lead to a bounce but more likely than not result in more pain; silver needs to form a base before launching higher again.

"Please no TK bashing. He has a different style of trading than Gary."- aviat

Yeah, not only a consistently losing one, but one that will blow out an account entirely in less than 3 months. If TK were actually trading his market calls, I'd wager he would have blown out several times over.

No offense to you aviat, follow him if you like, but please don't ask me to quit calling out the facts b/c you're sympthetic. Free speech is what you should support. It's not like we're at his site destroying his project, just that some of us consider him a pretty good fade.

The number of positions has nothing to do with profitability. In fact, the firm I worked with in the 1990's circulated a report on benefits of diversification, and the jist was that any more than 8 positions didn't benefit the investor, and might actually dent returns. (more to keep up with, poorer executions, and higher commissions w/smaller size per).

It's an illusion sold on Wall Street to justify management expenses. TK's position overload was the first sign to me that he was not profitable, the second was he was typically a buyer of options, and while I don't mess with options frequently, it's obvious only sellers of them make money over the long haul.

Gary: Can you please tell me where you gut the up volume/down volume numbers you use. Here's the link to Yahoo which shows 94% down on the AMEX but not anywhere near that on the NYSE. ???http://finance.yahoo.com/advances

Please take a look at that yahoo link, if you have a moment. The difference is dramatic and I'd hate to use data that is so badly off. Am I missing something? Hard to believe RR is, but 2-1 is not 10-1 by any stretch!

Checked it in stockcharts.com, which pretty closely agrees with Yahoo. Seems RR was wrong. I don't know why the Amex was so skewed except it is super thin and a few big trades can skew it. Also, it's where resource stuff trades, and they got socked today. No 9-1 doesn't really change things but i don;t like getting bad data.

Gary, you mention that silver has not moved much today in comparison to gold but measuring from the top it is down 15% compared to 6% for gold, couldn't the tame moved be explained by the presence of the psychological level at 25? it doesnt seem likely that it would just slice through $25 like it was not there

Unfortunately the dollar and true inflation contradicts the authors assumptions.

Oil wouldn't have reached almost $90 if there was no expansion of the money supply. Gold wouldn't have risen to over $1400 if there was no expansion of the money supply. Grains wouldn't have been trading limit up for days if there was no expansion of the money suppy. Silver wouldn't have rallied to almost $30 if there was no expansion of the money supply.

And the dollar wouldn't have dropped from 89 to 76 in 5 months if there was no expansion of the money supply.

Sometimes I'm simply amazed at what humans can convince themselves of when just a little common sense would reveal the truth.

There is a reason commodities are surging. It's because the Fed is printing and some of that liqudity is finding it's way into the commodity markets along with other asset markets.

Raz,If you've watched silver for as long as I have you would know something is going on in the silver market right now.

Silver is a thin market and as such technicals are virtually meaningless. It doesn't take much selling pressure to produce a huge move in such a thin market. Under normal conditions a 2% down day in gold would produce a 5+% move down in silver.

On Silver. In a note today by NS Futures posted at Kitco, they write CRIMEX Silver Stocks down 16 of last 20 days and are at lowest levels since '06. Somebody is making at run at the big bullion banks, the shorts on the Crimex...and it couldn't happen to a sleazier group of folks. Its not like they -banks- can turn to their Central Banking buddies to "borrow" Silver or "swap" Silver..cause they don't have any reserves either. And I think their might be something to Bill Downey's sarcasm I posted earlier about the CME raising margin rates every day while PRICE drops..protecting their buddies best they can. I hope they lose billions.

If you want to bash TK, go start your own blog. This is not an issue of free speech; bashing him does not add to the content on SMT.

It is fashionable to bash him because he is so public and vocal about what he does. You can learn something from everyone's style; even their mistakes.

And do you seriously believe that eight positions are diversified enough for a short portfolio? What if two of those eight get bought out at a 100% premium, and you end up with a 25% loss overnight?

Unlike other big short shops, who look at fundamentals, strategic position etc, to form their short thesis, TK trades chart patterns; he does not have the resources to investigate the fundamentals, the chance of buy-out etc. However, he can review 200 charts everyday.

There is a place for short positions in any large portfolio; that is why there are people who use his services. And there is also a place for options; ask those who got 20 baggers on AGQ. The challenge lies in allocating the appropriate amount of capital for your portfolio size. Trade Management, and sizing is what TK does best.

You say "And do you seriously believe that eight positions are diversified enough for a short portfolio?"

Long or short doesn't matter, over 8 positions is a waste of resources with no added benefit. You imply I'm against shorting, yet I do it all the time. I'm just not a permabear, especially in bull markets. I suspect by your comment you are attracted to shorting for other reasons than to be profitable.

You said "that is why there are people who use his services. "

What services? I wasn't aware TK was now charging for his awesome advice? :)

"It is fashionable to bash him because he is so public and vocal about what he does. You can learn something from everyone's style; even their mistakes."

Like I said, he's been a great fade. Nothing better than learning AND profiting from others mistakes.

"There is a place for short positions in any large portfolio;"

Why do you assume his portfolio is "large"? I think you're confusing number of positions with size of positions. If one has $20 million in 8 names, while the other has 2 calls on 200 names each, who has the larger portfolio?

And last, "If you want to bash TK, go start your own blog. This is not an issue of free speech; bashing him does not add to the content on SMT. "

Neither does defending a consistent loser (in trading) "add content" to SMT. It is YOU that should go start your own blog, or at least agree to hear what others have to say here. My point is that you should not determine what is said, only what you choose to believe. Don't tell others to squash what the observe.

I sure appreciate that TK sticks to his guns, but a money manager of his size can never ignore the trend and that is what he has done for almost 2 years now. How do you explain to your investors that you are betting against the trend? Shorting off charts against an uptrend is a losing battle. Smart shorts have lengthy explanations of why the company is a loser.....

GGuy, if you are here, please, explain the chart on eur/usd you posted one or two days ago. According it our next spring"s "great gold surprise" may be in danger? Surely, european authorities will dump euro to dollar in order it coudn't reach the level for example 2-1 to $ by various bailout measures/Greece, Ireland etc./ and even in such "bailout" enviorenment gold jumped in may but then filled the gap in summer inspite of declining $. Your chart suggests we may not see uptrend in gold next spring or see even decline? Or i'm missing smth? Please, answer and explain your chart.

Re silver's relative strenght on Tuesday: Seems to me a massive falling wedge is forming in silver (best seen on the hourly chart) that should -or at least may very well- break equally massive to the upside. (Left side 26.45/29.35 on Nov 9, lowest right point so far approx 25). I know patterns aren't the holy grail, but it's still nice to see this one clearly not spelling doom at all.

http://img717.imageshack.us/img717/3108/eurocycles.jpg GGuy,I was interested in this one.Please, answer,what does it mean for perspectives of DXY in near future and next spring? And its influence on gold price.

Covered some shorts yesterday; will do the rest today. SPX about to rally based on several non-correlated approaches. Let's hope the PM's join it. I am not a 100% PM's guy and so will "waste some time" (Gary's words) on stocks and be long soon ;)

Me too, but to be honest it was one of the easier trade of the year, the trade setup a mile away.

SB, That "20 bagger" was on $270, not $200, get your facts straight (kidding)and did I mention the fistful of "10 baggers", LOL. In all seriousness, you're all wasting your time arguing, nobody truly cares and Gary will be onto a new post before you know it :)

I did not find it so easy. I had lost on a few short setups prior. My sense is that the fed's pumping is overwhelming some of my most reliable short term indicators. I am having a good year, but my short terms shorts as a class have not been successful, which is unusual for me. This last one worked---finally---but we'll see about the future. Glad it worked easily and well for you. Let me know in real time what you short next. I usually post mine here (OIH, AMZN, and SPY this time)

Investing in the financial markets can involve considerable risk. Past performance is not necessarily an indication of future performance. The information included in The Smart Money Tracker and The SMT subscribers daily updates is prepared for educational purposes and is not a solicitation, or an offer to buy or sell any security or use any particular system. Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. G.D.S L.L.C., nor Gary Savage, do not represent themselves as acting in the position of an investment adviser or investment manager for funds that are not under their direct control and fiduciary responsibility. GDS L.L.C., Gary Savage, will not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. From time to time, GDS L.L.C., Gary Savage, may hold positions in securities mentioned, but are under no obligation to hold such position.